A lot of you may or may not be aware that Guitar Center in the US in its latest financial woes, have made the announcement that they are trying to file for Chapter 11 bankruptcy.
What are your thoughts? Do you want them to survive? Die off?
Personally, I don’t hate them like a lot of folks do and hope they make it. I feel like the accessibility to music will die if Guitar Center goes away. I’ve had great experiences at GC that I sadly can’t say were matched at the local shops around town.
I can’t complain about GC. They were open online during the peak of the lockdown back in March and delivered a bass, amp and accessories to me in less than a week, thus starting this whole adventure.
More recently I ordered a bass that was on sale and it arrived damaged. When I didn’t want to wait while they ordered a replacement, they let me swap it out for a slightly different model that was not on sale at no additional charge.
My understanding is that the Chapter 11 is primarily to give them some breathing room with creditors, and they anticipate being in and out of Chapter 11 fairly quickly without major store closures, layoffs, etc.
Most Chapter 11 filings survive; that’s the whole idea behind Chapter 11 (as opposed to Chapter 7). I personally don’t care one way or another.
I used to like browsing at their stores, despite their inept staff and horrid customer service. Since covid started, they have gotten even worse. Now you have to wait in line to get in, and then they won’t let you in unless you wear a mask, usher you through the store, and rush you to make a purchase or get the hell out.
I would prefer that a customer service oriented company like Sweetwater acquire them.
You are correct. In a Chapter 11, a Trustee will be assigned by the Bankruptcy Court and will essentially “run” the business and negotiate with creditors until the business is stabilized. The Trustee has the power to force the business to convert to Chapter 7 if the restructure is unsuccessful. Chapter 7 is total liquidation of assets and debts, and the owners just walk away.
(P.S. I retired as a Bankruptcy Paralegal in 2012. I still do some freelance work for a couple of attorneys).
The Mesa store and the Scottsdale store are the only ones I’ve gone to, and neither has been a pleasant experience. I just make all my purchases online with Sweetwater now, I just have to wait a few days to get it.
I went to Mesa for the first Sterling SUB 4 and the kid was nice enough. Avondale folks are nice as are the Phoenix (near the I-17 on Peoria) folks.
My main complaint and I think this has become more evident as time has been going on is the lack of inventory at a lot of stores. The Avondale store, while staffed with a nice crew and not a far drive regularly has very little in stock on the Bass wall. What they do have is a mix of beat to piss or things I have already.
Mesa has a lot of stuff on the wall and they seem to be in good shape for the most part, but man, that place is far.
The location near the I-17 was the best for me. I ended up getting the final addition in the collection for awhile (the missus will kill me if I add anything else until April), the Squier Contemporary Active Jazz Bass HH. The Staff was nice enough, store was clean.
I don’t know. I feel like it’s sad because I like the ability to go into a store and play things, hear how they sound - you know? It’s cool to hear people play and see where this can take me.
I hope that Guitar Center makes it through, tightens things up and runs a proper course. Sweetwater has been very tempting, but for this point in the journey, GC has been very good to me.
When it comes to instruments and amps and pedals that I want to try before I buy, I go to Milano’s in Mesa. Family owned business, they don’t have mask nazis like GC does, and Fred the bass guy is very knowledgeable (He’s been gigging for over 40 years). They don’t have the huge inventory of GC, but they can usually get what you want.
My bass coach is also at Milano’s
I think GC filing for bankruptcy is too bad.
There’s a ton of musicians working at those shops.
The bummer with their business model, and why I’ve never been a fan and have always encouraged going to the local shop, is that it’s based on volume.
Tons of orders across the entire country, thus giving them sway in the market with manufacturers to buy TONS of instruments at tremendous discounts.
The huge bummer here is that when a mammoth company sets itself up like this, if they go under or have problems, those problems are felt in huge ways through all the manufacturers.
I hope their problems don’t become the problems of companies we all know and love. Larger companies can absorb these things more easily, but this can be devastating from more boutique or mid-level companies… if they’re relying on the massive check from GC to come, it may not come now. Or may not come in full.
When you’re dealing with a company that is negotiating for discounts based on volume, you’re going to have razor thin margins to begin with.
I’m sure they’ll close a bunch of stores, but many of the employees will become telephone sales, customer service, or warehouse employees. It’s a classic paradigm shift, which is affecting many brick and mortar retail businesses.
@PamPurrs not panicking as much as wondering what the extent of the restructuring will be. They’re into Fender for a lot of money for one, I can only imagine how much for the smaller suppliers, you know?
bankruptcy doesn’t necessarily mean going out of business, i don’t think that is what they are intending. i know it’s hard for brick and mortar companies these days, but how are they struggling in the biggest guitar boom in my lifetime? i look at GC as being the best buy of guitar shops, you gotta pay extra but it’s convenient to be able to just run out and pick up a cable or whatnot. all these places should take a hard look at how sweetwater does it, as they are head and shoulders above all the other guitar chain stores.
Exactly, which is what I pointed out previously. Chapter 11 is protection from creditors, but without the liquidation of a Chapter 7. The Trustee will manage the business and negotiate with creditors, while restructuring the business. Only if the Trustee determines at a later time that GC is a complete train wreck, will he force them to convert to Chapter 7 and liquidate the assets and liabilities.